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[2015] ZAGPPHC 29
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Luckytso Transport and Construction CC and Another v Absa Bank Limited and Others (15438/2014) [2015] ZAGPPHC 29 (30 January 2015)
IN
THE NORTH GAUTENG HIGH COURT, PRETORIA
[REPUBLIC
OF SOUTH AFRICA]
CASE
NUMBER: 15438/2014
DATE:
30 JANUARY 2015
NOT
REPORTABLE
NOT
OF INTEREST TO OTHER JUDGES
In
the matter between:
LUCKYTSO
TRANSPORT AND CONSTRUCTION
CC
................................................
FIRST
APPLICANT
LUCKYTSO
KGOMOTSO
MOKWENA
.....................................................................
SECOND
APPLICANT
And
ABSA
BANK
LIMITED
.................................................................................................
FIRST
RESPONDENT
ZKN
INVESTMENT
CC
...........................................................................................
SECOND
RESPONDENT
SHERIFF
PRETORIA
EAST
........................................................................................
THIRD
RESPONDENT
DEEDS
OFFICE
PRETORIA
....................................................................................
FOURTH
RESPONDENT
THE
DEPARTMENT OF
FINANCE
.............................................................................
FIFTH
RESPONDENT
THE
COMPANIES AND INTELECTUAL
PROPERTY
COMMISSION
.........................................................................................
SIXTH
RESPONDENT
JUDGMENT
MAVUNDLA,
J.
[1]
The applicants seek an order directing the sixth respondent to have
the first respondent re-instated in terms of the
Companies Act 71 of
2008
and to have the sale in execution which was conducted on the
29
th
of January 2014 by the Third respondent on
instructions of the first respondent declared invalid.
[2]
The following aspects are common cause, namely that:
2.1
On the 19 October 2011 the first respondent obtained default judgment
against the first applicant wherein the immovable property
known as
portion 2 of Erf 1704 Silver Lakes Extension 4 ('the property")
was declared executable. It is also common cause
that the summons
upon which default judgment was obtained, was served by the sheriff
by way of affixing at the main entrance of
the aforesaid mentioned
property;
2.2
On 29 January 2012, a sale in execution was conducted by the third
respondent on instructions of the first respondent, at portion
2 of
Erf 1704 Silver Lakes, Extension 4 Pretoria, Gauteng, hereinafter
referred to as "the property"
2.3
The property was sold to the second respondent on 29 January 2014.
2.4
The first applicant is a close Corporation duly registered and
incorporated in terms of the Act, with primary place of business:
14051 Malema Street, Mamelodi-East, Gauteng;
2.5
The property as purchased by the first respondent during 2006 and a
mortgage bond was duly registered by the first respondent
to the
amount of R2 700 000. 00, and R540 000. 00
2.6
The second applicant was bound as surety and co-principal, jointly
and severally together with the first applicant regarding
the bond
mentioned herein above;
2.7
On the 1
st
August 2012 the first respondent obtained a
warrant of execution against the aforesaid property;
2.8
The first applicant was deregistered on 1 March 2013 by the registrar
of Companies and Intellectual Properties due to the fact
that it had
failed to file annual returns;
2.9
The aforesaid property was sold in execution on the 29 January 2014.
[3]
It was submitted on behalf of the applicants that the re-instatement
of the first applicant is requested in order to enable
an application
for rescission of the judgment which was taken by the first
respondent on the 19 October 2011. It was further contended
by the
second applicant that the first and second applicants were not aware
of the application that was brought on the 1
st
of August
2012 by the first respondent, and granted by this court. Furthered
the first and second applicant were not aware of the
sale in
execution which was held on the 29 February 2014 by the third
respondent. This was only brought to their attention on 28
February
2014, when the second applicant was contacted by the tenant regarding
the fact that unknown people were visiting the premises
in order to
view the property.
[4]
It is further submitted on behalf of the applicants that the second
applicant has
locus
standi
to
bring this application, in lieu of the fact that he was the sole
member and interested party to the first applicant, in terms
of
s83(4)(a)
of the
Companies Act 71 of 2008
.
[5]
It was further submitted that the re-instalment of the first
applicant will be to the benefit of the creditors and further it
will
allow the first applicant the opportunity to enter into a settlement
agreement with the first respondent wherein the arrears
will be paid
and the first applicant will be able to retain the aforesaid
property.
[6]
The second respondent is opposing the application contending,
inter
alia,
that
this court in terms of
s82
and specifically 82(4) of the
Companies
Act 71 of 2008
has no power to reinstate the first applicant and only
the sixth respondent has such power.
[7]
The second respondent further contended that the summons were
correctly served on the first applicant in terms of
Rule 4(l)(a)(iv).
It further conceded that the de-registration of the first applicant
has the effect that the first applicant ceased to exists and
its
assets became automatically owned by the State as
bona
vacatia.
However,
this did not affect the sale in execution of the immovable property
of the first applicant which took place on the 29 January
2014, so it
was submitted. The sale remains valid notwithstanding the
de-registration of the first applicant. I do not agree with
this
submission for the reasons set out herein below.
[8]
It is trite that upon deregistration, the assets of a deregistered
legal entity, as the first applicant
in
casu,
become
bona vacantia
and
falls automatically to the State;
vide
Sanlam v Rainbow Diamonds (Edms) en Andere
1982
(4) SA 633
at 638B. In
Miller
v Nafcoc Investment Holding
2010
(6) SA 390
(SCA) at 395D-E it was held that "Deregistration...puts
an end to the existence of the company. Its corporate personality
ends in the same way that a natural person ceased to exists at
death."
[9]
Although the deregistration of the first applicant, in effect
dissolved it
1
,
this however, did not extinguish its liabilities, but merely rendered
them unenforceable;
vide
Barclays National Bank Ltd v Kalk
1981
(4) SA 291
(W) at 295. The first applicant was deregistered on 1
March 2013 and its assets therefore became bona vacantia. In such
circumstances,
the sale in execution of the 29 January 2014 was
invalid because the first respondent's right to execute were
unenforceable at
that stage. In my view, the sale in execution stands
to be set aside.
[10]
In casu,
the
second applicant was the sole member of the first applicant, and is
therefore an interested person who qualifies to bring the
application
for the relief sought;
vide
Dorbyl Light and General Engineering (Pty) Ltd
2006
(5) 306 (W) at 312-314 and
section 83(4)
of the
Companies Act 71 of
2008
, which also to closed corporations. I am therefore, of the view
that the second applicant has
locus
standi
to
bring this application on behalf of the first applicant.
[11]
In my view, the Court has a discretion to declare the deregistration
of the first applicant to be void and order its reinstatement
on the
register,
vide
ABSA Bank Limited v Companies and Intellectual Property Commission of
South Africa and Others
2013
(4) SA 194
(WCC) at para[43].
[12]
In the matter of
Boland
Bank Limited v Mouton and Another
1997
(4) ALL SA 67
(C) at 75 c it was held that the provisions of
s26
the
Act does not contemplate that the corporation should be deregistered
in circumstances where it has assets and liabilities,
if such
deregistration would be prejudicial to creditors.
[13]
In the matter of
ABSA
Bank Limited v Companies and Intellectual Property Commission of
South Africa and Others
2
Yekiso
J held that a purported sale in execution of the property belonging
to the State as
bona
vacantia
is
void and granted an order restoring such property and set aside the
sale in execution. I am also of the view that at the time
when the
sale in execution took place, the property already vested with the
State and the sale thereof by the sheriff was accordingly
void and
stands to be set aside for this reason as well.
[14]
The court was requested to grant costs on attorney and client scale
against the second applicant. The question of awarding
costs is a
matter of the discretion of the Court. I take note of the fact that
the applicants are still to bring an application
for the rescission
of the order which triggered the entire process that culminated in
this application. Having regard to the nature
of this application, I
do not think that the opposition was frivolous. I am therefore
reluctant to grant a punitive costs order.
[15]
In the result I make the following order:
1.
That the sixth respondent is hereby directed to have the first
applicant reinstated;
2
That the sale in execution which was conducted on the 29 January 2014
by the third respondent is declared invalid and set aside;
3.
That the second respondent to pay the costs on opposed party and
party scale
N.M.
MAVUNDLA
JUDGE
OF THE HIGH COURT
DATE
OF HEARING: 05/12/2014
DATE
OF JUDGMENT: 30/01/2015
APPLICANT’S
ATT : SHUBNAM SINGH ATT
APPLICANT’S
ADV: ADV J C PRINSLOO
RESPONDENT’S
ATT : BRUNO SIMáO ATT
RESPONDANT”
ADV: ADV A A LUBBE (2
nd
RESPONDENT)
1
Vide
s83
(1) of the
Companies Act, No 71 of 2008
. In terms of si of Act
71 of 2008 "company" means, inter alia, a closed
corporation a as per
Close Corporations Act 1984
.
2
2013
(4) SA 194
(WCC).